Indian benchmark indices BSE Sensex and NSE Nifty 50 are among the best performers so far this year compared to major western and EM stock markets, with gains of over 4% year-to-date. Bank, oil & gas, fast-moving consumer goods (FMCG), and public sector enterprises are among the stocks that drove the rally in the index in 2022. The top five best-performing stocks in the Nifty 50 universe include Adani Enterprises which has rallied over 140% so far this year. It is followed by Coal India (up 54.7%), ITC (54.4%), M&M (up 52%) Axis Bank (40%).
Wipro is the worst-performing stock among the 50 constituents, having tanked over 45% so far this year. It is followed by Ultratech Cement, UPL, Titan Company, and Tech Mahindra. While Adani Enterprises entered the Nifty 50 universe this year, three other Adani Group companies feature in the top ten best-performing stocks in the Nifty100 Universe with their share prices rallying between 54-135%. Coal India is another public sector company making it to the list with gains of 54%, as the company benefited from the rise in domestic coal demand.
Meanwhile, IT stocks dominated the list of the worst Nifty 50 performers in 2022. Wipro tanked 45% in 2022 and Tech Mahindra, HCL Technologies, Infosys, and TCS were among the worst performers, falling 12-40% this year, as margins took a hit with work from office resuming and costs going up.
Outlook for 2023
The new year is just around the corner and analysts recommend investors exercise caution in 2023. “We expect weakness in tech stocks to continue on account of weak growth outlook. FMCG stocks are expected to do well on the back of fall in commodity prices and improving demand,” said Siddhartha Khemka, head – Retail Research, Motilal Oswal. Analysts at international brokerage firm Jefferies believe that the Nifty will remain range-bound between 18,000-19,000 next year.
“With India among the best-performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1 standard deviation levels, and remain a key overhang for market performance in 2023,” said Jefferies. Overall, the firm remains “overweight” on telecom, consumer staples and discretionary, real estate and utilities sector stocks, while it maintains “neutral” stance on the financial services sector. It has an “underweight” stance on IT, energy, healthcare, and materials sector stocks.
